TPI Efficiency Market Insights
Natural Gas & Oil Supply Update
Natural gas production has dipped below 100 Bcf daily as prices hover around $2.00. Meanwhile, oil prices are just above $77 per barrel, potentially leading to production cutbacks unless prices climb above $80/bbl. This reduction in oil production could impact secondary natural gas capture.
LNG Demand Outlook
The upcoming winter presents an intriguing scenario for LNG demand:
- European natural gas stockpiles are nearly 90% full, potentially limiting LNG’s market impact until mid-February.
- LNG exports remain steady at approximately 13 Bcf/d.
- LNG project approvals, temporarily suspended in January 2024, are back on track but most are delayed until 2026.
Weather Forecast & Energy Demand
After a cooler August, warmer weather across the country is expected to keep demand higher than usual. For the week of September 23-29:
- Most of the US will experience comfortable temperatures (60s to 80s).
- Localized hotter temperatures (90s) are expected in the Southwest and Texas.
- Weather systems will affect the east-central US early in the week and the Pacific Northwest mid-week.
- A strengthening tropical cyclone in the Gulf of Mexico warrants attention later in the week.
Expect low to very low energy demand for the next 7 days.
NYMEX NATURAL GAS CALENDAR STRIPS
ALL ABOUT THE NYMEX TWELVE-MONTH STRIP
- The NYMEX Twelve Month Strip is the average of the upcoming 12 months of closing Henry Hub natural gas futures prices as reported on CME/NYMEX.
- A futures strip is the buying or selling of futures contracts in sequential delivery months traded as a single transaction.
- The NYMEX Twelve Month Strip can lock in a specific price for natural gas futures for a year with 12 monthly contracts connected into a strip.
- The average price of these 12 contracts is the particular price that traders can transact at, indicating the direction of natural gas prices.
- The price of the NYMEX Twelve Month Strip can show the average cost of the next twelve months’ worth of futures.
- The NYMEX Twelve Month Strip is also used to understand the direction of natural gas prices and to lock in a specific price for natural gas futures for a year.
Stay tuned for more updates from TPI Efficiency as we continue to monitor market trends and weather patterns affecting energy demand.
